Launch of Organic Gatorade

Launch of Organic Gatorade

PepsiCo’s launch of organic Gatorade was them trying to stay one (or a couple) steps ahead of their competition. They saw the opportunity of a growing market within the organic beverages space and a clear upward demand trend for organic beverage products. Based on my assessment, there is definitely an opportunity and growing consumer demand for such products and PepsiCo should go ahead and avail first movers’ advantage.

Similar to its biggest competitor, Coca Cola, PepsiCo is a giant of the consumer products industry. For a long time, PepsiCo offered just one product (which was competing with Coke), but later both companies diversified and expanded into the wider food and drinks business. The functional drinks market presents a tremendous opportunity, and the acquisition of Gatorade is a good move on PepsiCo’s part. As demonstrated by market research, there is a correlation between increasing health trends and demand of organic beverages. It’s for this reason that PepsiCo should go ahead and launch Gatorade. How to go about that launch and which customer segments is target are some of the key questions that I will now explore. Firstly, I will discuss target segments, before moving onto communication strategy, distribution and, finally, discuss potential metrics to help measure the success/failure of the campaign.

There are three target customer segments for the organic beverages market, which are as follows:

a) Athletes: This is the primary target segment, and can further be broken down into professional and amateur athletes. This segment is more health savvy and more likely to purchase organic drinks (research indicates the segment is more likely to perceive organic drinks as healthier). Due to changing health trends, there has been a rise in amateur athletes (people that are either heavily involved in non-pro sporting activities or regular exercise). It’s because of these reasons that this segment will be critical for early adoption, trend-setting and success.

b) Demographic seeking variety: This segment comprises of customers looking for variety (above and beyond existing drink options). While these customers are not likely to be as loyal as athletes, for example, there is a fair revenue opportunity e.g. impulse buys, or Gatorade preference when choosing healthier drinks

c) Demographic seeking healthier drink options: This segment is simply looking for healthier drink choices and would converge towards a brand that offers it.

Now that the target segments have been identified, locking down a solid branding and communication strategy is critical.

Gatorade should be marketed as a healthier product. However, since consumers often fail to follow through on their good intentions in regards to dieting, it’s also important for PepsiCo to nudge